Obama asks Indonesia to ‘join hands’

Erwida Maulia , The Jakarta Post

US President Barack Obama called his Indonesian counterpart Susilo Bambang Yudhoyono on Friday to express Washington’s willingness to involve Jakarta in tackling , including the environment and the financial crisis.

Obama also told Yudhoyono in the 10-minute phone conversation that he wanted to build “a comprehensive partnership” between the two countries, said Indonesian presidential spokesman Dino Patti Djalal.

The US president also thanked Indonesia for the “warm” and “friendly” welcome it had extended to US Secretary of State Hillary Clinton when she visited the country last month, Dino said.

“President Obama said he wanted to work together with Indonesia in coping with global issues, such as climate change,” Dino told The Jakarta Post.

“The two leaders also discussed the prospects and preparations ahead of the G-20 Summit in London this April, and they pledged to make it a success.”

Yudhoyono and Obama will attend the annual summit of the group of the world’s largest economies, in which Indonesia and the United States are members.

Regarding bilateral relations between Indonesia and the United States, Dino said Obama agreed with Yudhoyono’s proposal on a comprehensive partnership between the two countries, and was willing to realize it.

The partnership was proposed by Yudhoyono during their first phone conversation in November last year. Yudhoyono was on a stopover in Seattle on his way back home from the APEC Summit in Lima when he received then president-elect Obama’s phone call.

Secretary Clinton said during her visit to Jakarta that “building a comprehensive partnership with Indonesia is a critical step on behalf of the United States’ commitment to smart power”.

“The partnership is welcomed by President Obama, who wants to realize the proposal,” Dino said.

He added Obama still maintained his fluency in pronouncing Indonesian words.

“When President [Yudhoyono] began with, ‘Apa kabar?’ [How are you?], Obama answered in Indonesian, ‘Baik-baik’ [I’m fine],” Dino said.

But he said the two leaders did not specifically discuss relations between the United States and the Muslim world.

Vice President Jusuf Kalla touched on this issue when he met with his US counterpart Joe Biden in Washington in early February.

Kalla said during the meeting that Indonesia hailed the changes Obama had initiated, but was curious to see if they would have an impact on relations between the West and the Muslim world, which took a hammering under the administration of former president George W. Bush.

Islamic banking

Terry Lacey , The JAKARTA Post

The Fifth World Islamic Economic Forum (WIEF) opened on Monday in Jakarta. The global Islamic financing industry has over US$1 trillion in assets. But Indonesian Islamic finance accounts for less than 3 percent of banking assets and lacks the know-how, staff and infrastructure to expand faster.

Indonesia is maintaining economic growth at over 4.5 percent and bank lending growth rates at over 15 percent.

If Indonesian conventional banking is doing quite well amidst a global banking crisis, why is Islamic banking in Indonesia moving so slowly?

The signing at the Forum of Memorandums of Agreement (MoAs) pending final negotiations on four Indonesian projects worth $ 3 billion was encouraging.

But an MoA is maybe half way to a full MoU, and in Indonesia too many MoUs evaporate. The road to nowhere can be paved with good intentions.

The problem in Indonesia and Muslim countries in transition is how to get from intention to im-plementation, as testified by the unfinished concrete pillars of the Jakarta monorail, monuments to lack of capacity, corruption and incompetence.

Now WIEF is five years old. It will be judged in the next five years by Muslim opinion on what is finished and not on what is half agreed.

The long list of Indonesian projects needing financing at the back of the Islamic Forum 2009 agenda highlights Indonesian needs for investment in toll roads, water supply, bridges, ports and power stations as well as biofuel, agriculture and tourism.

Yet performance in "Tapping Islamic funds" has fallen far short of potential, especially in government infrastructure projects and public-private partnerships.

There is a history of low capacity, poor project preparation, bureaucratic delays, slow reform of regulatory frameworks and poor enforcement, corruption, confusion and under-capacity in the implementation of decentralization.

Despite Indonesia*s predominantly Muslim identity there is also a discernable communication gap between the Indonesian bureaucracy and the more modern style of Gulf-based potential investors and developers.

There is a language gap. Many Indonesian officials cannot do business in English or Arabic. Many can recite prayers in Arabic, but cannot use it as a working language.

The Indonesian tendency to engage Arab culture and Arabic only at the level of religious ritual needs to be complemented by a more comprehensive commitment to modern dialogue with the Arab world on economic, social and political partnerships for Muslim modernization, moderation and democracy.

We cannot assume automatic affinity of interest based on the similarity of Muslim rituals, across very diverse cultures, unsupported by greater realities.

These communication gaps may help explain the relative modesty of the flow of resources from the Middle East so far and why in Indonesia there remains a huge gap between declarations of support for sharia banking and reality.

The Deputy Governor of the Bank of Indonesia, Siti Fadjrijah said in Jakarta in January that sharia banking could not reach the national 5 percent target in terms of national banking assets because " It's impossible during these hard economic times ".

Why is it impossible if there is $1.6 trillion of liquid assets in the Gulf States and Saudi Arabia waiting to be invested, despite the recession ?

Indonesian sharia banking reached 3.79 million customers in 2008 via 1,452 bank outlets, compared to 6,500 conventional bank outlets. The latter backed by 97 percent of banking assets, and the former by only 3 percent. Why so little capital ?

Indonesian sharia banking disbursed only 589,000 loans in 2008 compared with 512,000 in 2007. Why so few ? Sharia banking "Loan disbursement is like a walking tortoise" said Siti Fadjrijah.

The sharia banking industry, to reach the 5 percent of banking assets target, would need an estimated 15,000 to 25,000 extra staff.

Given the global economic crisis, this would seem the right time to properly engage Middle Eastern partners, to speak Arabic as a language of business alongside English and Chinese, to invest in the huge Islamic banking potential of Indonesia, to hire the staff, create the jobs, and move more loans. So why doesn't Indonesia do it ?

The Council of Ulema, the Muhammadiah, the Nahdlatul Ulama, the conservatives, the liberals, the sharia banks, the sharia banking training and promotional agencies, the university departments, the NGOs and the little sharia banking lending groups should combine their efforts to bring this about, to deploy the uniqueness of shared profit and loss, one of the great innovations of sharia finance, to finance power and water for the poor and SMEs, to the benefit of the whole society.

RI`s 2008 export growth exceeds target

Jakarta (ANTARA News) - Indonesia`s non-oil/gas exports in 2008 grew 17.16 percent to US$107.8 billion from a year earlier, the Central Bureau of Statistics (BPS) said.

The 2008 export growth exceeded the government-set target of 14.5 percent, BPS Deputy Chief Ali Rosidi said here on Monday.

Vegetable and animal oils, nearly 80 percent of which came from crude palm oil (CPO) topped the list of the country`s non-oil/gas exports last year, contributing 14.46 percent of the total non-oil/gas exports, he said.

He said vegetable and animal oil exports rose to US$15.53 billion in 2008 from US$10.23 billion the year before.

Mineral fuel came in second with a value of US10.67 billion, accounting for 9.89 percent of the total non-oil/gas exports. In 2007, mineral fuel exports stood at US$7.12 billion.

Machinery and electrical appliances contributed 7.51 percent of the total non-oil/gas exports with US$8.09 billion compared to US$7.52 billion the previous year, he said.

Rubber and rubber-based product exports made up 7.04 percent of the total non-oil/gas exports, increasing to US$7.59 billion in 2008 from US$6.25 billion a year earlier, he said.

Mechanic appliances contributed 4.84 percent of the total non-oil/gas exports with a value of US$4.68 billion in 2008 from US$5.21 billion in 2007, he said.

Compared to November 2008, the export of the five different commodities in December 2008 declined in the range of US$14 million to US300 million, he said

Source : Antara

Indonesia's PLN raises 2.2 trln rph from bond sales

JAKARTA, Jan 9 (Reuters) - Indonesia's state electricity firm PT Perusahaan Listrik Negara (PLN) has raised 2.2 trillion rupiah ($201 million) from conventional and Islamic bond issues, a securities firm involved in the deals said on Friday.

Indonesia's monopoly power supplier had aimed to raise 1.5 trillion rupiah from the bond issues, to help finance investment in power transmission.

It has about 24,000 MW of generating capacity but most of its plants are old, so daily output is far below capacity.

Sonny Thendian, head of trading sales at PT Indo Premier Securities, said that investors had been attracted by the high yield and potential for bond prices to rise as the central bank continued to lower interest rates.

Bank Indonesia (BI) cut its key interest rate BIPG by 50 basis points to 8.75 percent, more than expected, on January 7.

"The highest demand came from insurance firms and pension funds," said Thendian.

PT Indo Premier Securities, PT Danareksa Sekuritas, PT Trimegah Securities Tbk (TRIM.JK) were underwriters for the issues.

PLN raised 1.44 trillion rupiah from two series of fixed-rate conventional bonds. The five-year bond, maturing in 2014, has a coupon of 14.75 percent, while the seven-year bond, due 2016, has a coupon of 15 percent.

It also raised 760 billion rupiah from two series of Islamic bonds, or sukuk, which were issued under the "ijarah" or leasing arrangement.

One series, due in 2014, has a coupon of 14.75 percent, while the other series, due in 2016, has a coupon of 15 percent.

Islamic bonds do not pay interest, which is banned as usury under Islamic law, and are structured as profit-sharing or rental agreements underpinned by physical assets. ($1 = 10,950 rupiah) (Reporting by Sonya Angraini; Editing by Sara Webb)

Indonesia dan New Zealand to resume FTA talks in March

Jakarta (ANTARA News) - The negotiation on Free Trade Agreement (FTA) between Indonesia and New Zealand is expected to be resumed in March 2009 after the signing of the ASEAN-Australia-New Zealand FTA agreement in February, 2009.

"We hope that the negotiation could be resumed soon after the signing of ASEAN-Australia-New Zealand FTAB. Hopefully it could be done in March," Director General for International Trade Cooperations of the Trade Ministry Gusmardi Bustami here on Saturday.

Gusmardi denied allegation that there had been such a tension between the two countries which caused a cancellation of the negotiations concerned. "It is not true there is no friction. We have agreed to continue the talks between the two countries` trade ministers."

According to him, the follow up negotiation between the two countries would focus on the details of agreements ever made by the two trade ministers.

In the meantime, ASEAN-Australia-New Zealand FTA launched in November 2004 will expire at the end of this year.

In the agreement, Indonesia will scrap import duty for 10,397 post tariff or 93.17 percent of the total post tariff as of 2009 till 2020. As many as 645 others are to have their tariff lowered, while other 117 will be subject to an exception.

Australia will abolish all kind of import duties from ASEAN as of 2009 till 2015 and at least 91,77 percent of the total post tariff will be lowered in 2009-2010 period, while New Zealand will remove 97,4 percent of the total post tariff at a stage of 80 percent in 2009 and 90 percent in 2012.

During the negotiation, Australia will target the opening of Indonesian automotive products, while New Zealand will open beef market and diary products.

For automotive, Indonesia will render a different treatment between Australia and Japan. The agreement on automotive sector with Australia will take into account the agreement between Indonesia and Japan.

"Little bit different, because what is asked by Australia like passenger car we have to allow it in 2020 and not in 2018 like that with Japan," Gusmardi said.

Indonesia asked the two countries to accelerate the abolition of tariff for textile product and garment which is currently standing in a range of 5 to 17.5 percent from 2009 or 2010 for Australia and 7.75 to 19 percent for New Zealand starting 2017 or 2018.

In addition, Australia also provided an investment in agribusiness to review and arrange the capacity of development working programs as well as to push an investment in meat sector and diary products.

New Zealand also offered a facility like the sending of 100 Indonesian workers under a working holiday scheme, job opportunity for 100 cooks, 20 slaughters for halal certified meat and 20 teacher assistant for Indonesian language.

What Makes a Radical?

An excerpt from the book Who Speaks for Islam? by John L. Esposito and Dalia Mogahed

Understanding extremists and the nature of extremism requires a global perspective that extends beyond conflicting opinions of experts or anecdotes from the "Arab street." What do Muslims polled across the world have to say? How many Muslims hold extremist views? What are their hopes and fears? What are their priorities? What do they admire, and what do they resent?

According to the Gallup Poll, 7% of respondents think that the 9/11 attacks were "completely" justified and view the United States unfavorably. Among those who believe that the 9/11 attacks were not justified, whom we'll call "moderates," 40% are pro-United States, but 60% view the United States unfavorably.

Analyzing and comparing the answers of the 7% with the moderate majority produced some surprising results. By focusing on the 7%, whom we'll call "the politically radicalized" because of their radical political orientation, we are not saying that all in this group commit acts of violence. However, those with extremist views are a potential source for recruitment or support for terrorist groups. This group is also so committed to changing political conditions that they are more likely to view other civilian attacks as justifiable: 13% of the politically radicalized versus 1% of moderates say that attacks on civilians are "completely justified."

What is the age and gender of those with extremist views? They are younger, but not substantially: 49% are between the ages of 18 and 29; 41% of those with moderate views are in the same age range. Contrary to what some might expect, while political radicals are more likely to be male (62%), 37% are female. In addition, a minority of suicide bombers have been women.

What Is the Link Between Terrorism and Poverty or Ignorance?

The Arab Development Report of 2005 and many other studies of Muslim countries well document the existence of significant poverty and illiteracy. These problems are found in Palestinian refugee camps and in the slums of Algiers, Cairo, Baghdad, and Jakarta as well as in many other non-Muslim developing nations. Poverty and lack of information and skills necessary for social mobility result from deep-seated economic and social problems that can generate broad-based discontent. But are lack of education and poverty key factors that distinguish those with extremist views from moderates? The data say no.

The politically radicalized, on average, are more educated than moderates: 67% of the politically radicalized have secondary or higher educations (versus 52% of moderates).

Radicals are not more economically disadvantaged: 65% of the politically radicalized say they have average or above-average income, versus 55% of moderates.

Based on the largest and most in-depth study of its kind, Who Speaks for Islam? What a Billion Muslims Really Think presents the remarkable findings of the Gallup Poll of the Muslim World, the first ever data-based analysis of the points of view of more than 90% of the global Muslim community, spanning more than 35 nations. Learn more Who Speaks For Islam?: What a Billion Muslims Really Think